Chancellor vs Brexit

Featuring Daniel Sladen | 13th March, 2019

We expected the Spring statement to be overshadowed by this week’s Brexit votes, but perhaps not to this extent. The Chancellor gave a perfunctory economic update and recited the usual litany of Government successes and Opposition failures, but the focus was really on the need to pass a deal and the impossibility of making any plans until the exit from the EU becomes clear.

There was a commitment to kick off a 3-year comprehensive spending review and a national infrastructure strategy before Parliament’s summer recess – but only once a deal is reached. A raft of consultations, calls for evidence, and other policy development processes were announced, but almost no new measures were brought forward. To downplay the statement further, much of the content was laid in a written ministerial statement so that the speech didn’t take any more time than necessary away from today’s Brexit vote debate.

What was clear is that the Chancellor is not committing to further contingency planning for Brexit outcomes other than the current withdrawal agreement (that is to say, the one voted down in January and again last night) so an emergency Budget will probably be needed in the event of a materially different outcome such as no deal.

There were a few headline-friendly small announcements, including a supercomputer and some lasers, and progress toward phasing out fossil fuels in domestic heating systems, but little else.

Perhaps the most notable point was the amount of his speech the Chancellor devoted to the Brexit votes, going well beyond the Government’s line in talking about the risks of no deal, implying that the Prime Minister’s red lines might need to change to get a deal the House could agree on, and exhorting MPs to reject no deal (despite the Government’s policy of allowing a free vote on that question today). As the amendments are debated later today and MPs decide exactly how they want to rule out no deal, expect his comments to be referred to a few more times.

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